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Sharding is a scalability technique used in blockchain technology, where the network is divided into smaller, more manageable pieces, or “shards.” Each shard contains its own independent state, meaning a unique set of account balances and smart contracts. The idea is to distribute the computational and storage workload across a network so that each node doesn’t have to process the entire network’s transactional load.

Sharding improves the throughput and speed of the blockchain, as multiple transactions can be processed in parallel, significantly increasing the network’s overall capacity. However, it also poses challenges in ensuring secure and efficient communication and transactions between different shards.